Search found 311 matches

by k66
Thu Nov 24, 2016 5:02 pm
Forum: Investing - Theory, News & General
Topic: What is the unknowability of the market?
Replies: 30
Views: 1576

Re: What is the unknowability of the market?

TomCat96: I think you are asking for some type of quantification of a non-quantifiable property. As Valuethinker points out, Black Swans exist (we know that), but we can't dimensionslize them because, by their very nature, we don't know what they are or when they will actually manifest themselves.
by k66
Wed Nov 23, 2016 5:45 pm
Forum: Investing - Theory, News & General
Topic: VTI is 50% above pre-crash peaks. Does this make sense?
Replies: 17
Views: 2202

Re: VTI is 50% above pre-crash peaks. Does this make sense?

Don't assume that any given market will recover. We have good precedent that they will, but exceptions always occur. Ours is not to reason why, it is but to do and buy (and rebalance). Of course we should assume the market will recover, the issue is over how long. The market will generally at least...
by k66
Wed Nov 23, 2016 5:32 pm
Forum: Investing - Theory, News & General
Topic: VTI is 50% above pre-crash peaks. Does this make sense?
Replies: 17
Views: 2202

Re: VTI is 50% above pre-crash peaks. Does this make sense?

Don't assume that any given market will recover. We have good precedent that they will, but exceptions always occur.

Ours is not to reason why, it is but to do and buy (and rebalance).
by k66
Wed Nov 09, 2016 11:47 pm
Forum: Investing - Theory, News & General
Topic: US index
Replies: 8
Views: 1069

Re: US index

I'd be curious to see how many have language in their Investment Policy Statement that addresses situations like these and how they anticipated handling them. I have some language but it is vague--and intentionally so. It is meant more as a catch-all for any odd, unexpected, or reactionary kinds of...
by k66
Thu Nov 03, 2016 8:41 am
Forum: Investing - Theory, News & General
Topic: Slipping last few days- time to buy now or wait until after 11/8?
Replies: 99
Views: 10080

Re: Slipping last few days- time to buy now or wait until after 11/8?

Toons wrote:Time Not Timing.
Put the compounding machine to work.
ASAP :moneybag


+1: We can never say this enough!
by k66
Tue Oct 04, 2016 1:53 pm
Forum: Investing - Theory, News & General
Topic: Adjusting the x% spending rule
Replies: 27
Views: 2684

Re: Adjusting the x% spending rule

The x% spending rule says to spend x% of your portfolio the first year in retirement and to adjust spending upward each year with inflation. Bengen studied a 4% spending rule. It has the advantage of allowing for stable spending -- unless the money runs out. The initial x is chosen based on a trade...
by k66
Wed Sep 28, 2016 12:28 am
Forum: Investing - Theory, News & General
Topic: If you own Vanguard Total Stock Market, do you re-invest dividends?
Replies: 75
Views: 9286

Re: If you own Vanguard Total Stock Market, do you re-invest dividends?

I always reinvest. I am also in the accumulation stage and save in tax deferred accounts. I only purchase once the commission that will be paid is less than 1% of free cash (e.g. My commission is currently $8, so I wait until I have at least $800 free cash--similar to the $1000 figure previously men...
by k66
Sun Sep 25, 2016 1:51 pm
Forum: Investing - Theory, News & General
Topic: Selling in October
Replies: 43
Views: 3117

Re: Selling in October

http://www.moneychimp.com/features/monthly_returns.htm

Hmmm --MoneyChimp offers two very important pieces of information: (1) September (not October) is the real danger month, and (2) instead of bothering with market timing based on noisy scatter, stick through it all full time for the best results.
by k66
Sun Sep 25, 2016 9:12 am
Forum: Investing - Theory, News & General
Topic: Selling in October
Replies: 43
Views: 3117

Re: Selling in October

MEA: you can do as you please of course but you still would presumably want to buy back into the market. What is your strategy for that? At the very least, please develop a catchy rhyming second clause to get us interested. Maybe "sell in October, until it's all over". That sounds like as...
by k66
Sun Sep 25, 2016 8:42 am
Forum: Investing - Theory, News & General
Topic: Selling in October
Replies: 43
Views: 3117

Re: Selling in October

MEA: you can do as you please of course but you still would presumably want to buy back into the market. What is your strategy for that? At the very least, please develop a catchy rhyming second clause to get us interested. Maybe "sell in October, until it's all over". That sounds like as ...
by k66
Thu Sep 22, 2016 9:45 pm
Forum: Investing - Theory, News & General
Topic: Facing Up to low yielding world
Replies: 11
Views: 2276

Re: Facing Up to low yielding world

The first paragraph says it all--almost. Investors should avoid the lure of riskier assets, save their money and get comfortable with lower returns over the coming years, according to top strategists at Vanguard Group Inc., the world’s second-biggest asset manager. Rather than "getting comforta...
by k66
Tue Sep 20, 2016 11:00 pm
Forum: Investing - Theory, News & General
Topic: Evolution of the S&P 500 Composition
Replies: 6
Views: 819

Evolution of the S&P 500 Composition

From the Reformed Broker: Evolution of the S&P 500 Composition To me, the most important line in the story is the final one, quoting S&P Dow Jones committee member David Blitzer: “At the end of the day, it’s more an art, not a science.” Slightly thought provoking in that the 500 is not as ri...
by k66
Sun Sep 18, 2016 2:12 pm
Forum: Investing - Theory, News & General
Topic: A look at the research and evidence on time-series MOM
Replies: 134
Views: 9062

Re: A look at the research and evidence on time-series MOM

To a certain extent, TS Momemtum sounds an awful lot like the "Turtle" school of trading. Originally of course they uses commodities but the principles could be expanded to any tradable security. I wanted to go find one of my old Turtle Traders books but can't seem to place any of them... ...
by k66
Thu Sep 15, 2016 7:10 pm
Forum: Personal Finance (Not Investing)
Topic: Keys to a Successful Retirement
Replies: 55
Views: 6999

Re: Keys to a Successful Retirement

... - Purchase life annuities in chunks over time as you continue to age. Begin these purchases sometime after you have started taking your delayed Social Security benefits. That's interesting. Is it based on the idea that as you continue to "survive" you are likely to continue surviving ...
by k66
Mon Sep 12, 2016 9:39 pm
Forum: Investing - Theory, News & General
Topic: How long would it take to turn $1 into $1 million?
Replies: 7
Views: 1164

Re: How long would it take to turn $1 into $1 million?

If you could consistently find a 10% winner every day over 145 trading days you could turn $1 into $1M. 145 trading days is approx 29 weeks (6 to 7 months) excluding trading costs (which would probably exceed all your gains early on). The odds of flipping a fair coin 144 times and getting the same r...
by k66
Mon Sep 12, 2016 8:38 pm
Forum: Investing - Theory, News & General
Topic: projected returns
Replies: 11
Views: 998

Re: projected returns

Based on historic returns I make projections based on the following: a) Accumulation (10 years remaining) @ 6% real and allow for 25 bp MER (although currently at 9 bp). b) Decumulation (35 years) @ 5.5% real and again allow for a 25 bp MER. NB: All of the above is irrelevant; I will get what I get ...
by k66
Fri Sep 09, 2016 11:09 pm
Forum: Investing - Theory, News & General
Topic: rebalancing now in a simple 2 fund portfolio and/or a 3 fund portfolio
Replies: 1
Views: 401

Re: rebalancing now in a simple 2 fund portfolio and/or a 3 fund portfolio

Unless of course you don't need to rebalance or it's not part of your plan (IPS*).

* edited to correct ISP to read IPS (investment policy statement).
by k66
Thu Sep 08, 2016 4:51 pm
Forum: Personal Finance (Not Investing)
Topic: Can we disprove the 3% perpetual withdrawal rate?
Replies: 36
Views: 3417

Re: Can we disprove the 3% perpetual withdrawal rate?

You can neither prove nor disprove the possibility of a "reasonable" withdrawal rate in our usual understanding (e.g. 30 to 35 years to depletion, inflation adjusted, typical AA, etc). We can create models based on historical data or Monte Carlo simulations (but each has their own weakness...
by k66
Fri Sep 02, 2016 9:31 am
Forum: Investing - Theory, News & General
Topic: Vanguard fees hit and miss?
Replies: 9
Views: 938

Re: Vanguard fees hit and miss?

Shakenbake: I would agree--consolidation (of funds) is usually always good and even better if you can do so while also reducing MER-type fees and increasing diversification. However I think you may want to formulate a plan--a roadmap if you will--of how to do those things concisely and efficiently. ...
by k66
Fri Sep 02, 2016 8:57 am
Forum: Investing - Theory, News & General
Topic: Luck v Skill (Bloomberg)
Replies: 6
Views: 1065

Luck v Skill (Bloomberg)

Always an interesting topic: Given that random chance can obviously affect outcomes that we otherwise want determined by pure skill alone, how much "luck" is necessary to create unpredictable results? Why Luck Plays a Big Role in Making You Rich In terms of actionable discourse, perhaps it...
by k66
Wed Aug 31, 2016 9:38 am
Forum: Investing - Theory, News & General
Topic: Vanguard ETF shares in general so expensive...
Replies: 20
Views: 1767

Re: Vanguard ETF shares in general so expensive...

shakenbake: do you have an IPS by which to determine your target asset allocation and overall investment strategy? If not, I think most everyone here would recommend writing one and using it to better hone your future investment purchases.
by k66
Wed Aug 31, 2016 8:58 am
Forum: Investing - Theory, News & General
Topic: Do you follow a VWR formula?
Replies: 13
Views: 1322

Re: Do you follow a VWR formula?

I'm currently reading McClung's "Living off your money" and he's got an entire section devoted to variable withdrawal formulas and their relative performance in his model. I'd never really thought about there being an actual VWR model per se, more that you'd spend what you needed and then...
by k66
Sat Aug 20, 2016 12:15 pm
Forum: Investing - Theory, News & General
Topic: oil&gas bankruptcies
Replies: 8
Views: 1041

Re: oil&gas bankruptcies

What are you missing? But what are you asking? Are you looking to extrapolate a future macro-economic scenario based on very small pieces of data? Consider that there are an indeterminate number of variables involved in this non-linear system with constantly moving boundry conditions. Expecting a co...
by k66
Fri Aug 05, 2016 12:49 am
Forum: Investing - Theory, News & General
Topic: How to think about non-invested $
Replies: 20
Views: 2049

Re: How think about non-invested $

Cash is part of your AA - so it should be included. Doesn't make sense otherwise. Exactly. Too often we forget that there are three primary assets by which we should construct an investment portfolio: equities, bonds and cash. Even if we conceptually lump cash & bonds under the same roof, we sh...
by k66
Wed Jul 27, 2016 1:50 pm
Forum: Investing - Theory, News & General
Topic: How can markets keep going up ?
Replies: 131
Views: 10001

Re: How can markets keep going up ?

Given that many of tomorrow's corporate mountains are likely as yet unformed, we should perhaps consider that the upper limit of the market remains conceptually unbound.

Can a Company Live Forever?
by k66
Sun Jul 10, 2016 1:41 am
Forum: Investing - Theory, News & General
Topic: Why do we assume that a well diversified portfolio will inevitably increase over the long term?
Replies: 52
Views: 4338

Re: Why do we assume that a well diversified portfolio will inevitably increase over the long term?

Consider that individual stocks rise and fall over a certain lifespan. Holding any one stock in perpetuity is likely not a winning proposition. Consider also that multiple stocks, as a group, have better collective price appreciation. It might not be easily explained by theory but we see it material...
by k66
Sat Jul 09, 2016 6:45 pm
Forum: Investing - Help with Personal Investments
Topic: gearing [using Leverage]
Replies: 32
Views: 2161

Re: gearing

Can you explain your use of the term gearing w.r.t. your own portfolio?

From Investopedia:
http://www.investopedia.com/terms/g/gearing.asp

Are you perhaps meaning (on) margin instead?
by k66
Sun Jul 03, 2016 10:20 am
Forum: Investing - Theory, News & General
Topic: Japan's stock market in 1989?
Replies: 6
Views: 950

Re: Japan's stock market in 1989?

So in our portfolios, should we have at least 50% international stocks and bonds? Since we won't know how the domestic side or the international side of stocks and bonds will perform in the future, wouldn't this mix be the safest bet that also allows for the greatest returns? Not necessarily--I wan...
by k66
Mon Jun 27, 2016 8:03 am
Forum: Investing - Theory, News & General
Topic: Alt Funds Not So Good on Brexit Friday (-.71%)
Replies: 9
Views: 1079

Re: Alt Funds Not So Good on Brexit Friday (-.71%)

Are there any data on how hedge funds performed during this time (from the last few months onward as Brexit became bigger and bigger news). I suppose it is way to early, but it would still be interesting to see how they negotiated this financial pothole too.
by k66
Fri Jun 24, 2016 7:52 pm
Forum: Investing - Theory, News & General
Topic: Would today be a good day to rebalance?
Replies: 34
Views: 3464

Re: Would today be a good day to rebalance?

Once the remainder of my quarterly & monthly dividends arrive, I will be buying what ever fund is furthest behind its target allocation. I would be doing this regardless of the latest news may be.
by k66
Wed Jun 22, 2016 8:57 am
Forum: Investing - Theory, News & General
Topic: Buy LNKD? [LinkedIn]
Replies: 14
Views: 1206

Re: Buy LNKD? [LinkedIn]

Am I buying LNKD? I will tell you what I tell my brother-in-law every time he starts going on about his latest hot pick, "Yeah, I bought some of that too"... meaning I bought it inside VTI, but I don't tell him that part.
by k66
Wed Jun 08, 2016 1:16 am
Forum: Investing - Theory, News & General
Topic: Investing 2x/week (rather than lump sum) is the best thing I've done.
Replies: 32
Views: 3128

Re: Investing 2x/week (rather than lump sum) is the best thing I've done.

Have there been any studies or analyses done wrt the granularity of contributions made? Obviously one needs historical daily price fluctuations to see what the benefit(s) may be. I think we have seen or read example cases where bi-weekly or monthly contributions generally win-out over waiting to mak...
by k66
Mon Jun 06, 2016 12:23 am
Forum: Investing - Theory, News & General
Topic: BAC stock [Bank of America]
Replies: 4
Views: 681

Re: BAC stock [Bank of America]

Does it really matter?
by k66
Mon May 16, 2016 10:27 pm
Forum: Investing - Theory, News & General
Topic: How valuable is my defined benefit pension?
Replies: 8
Views: 1666

Re: How valuable is my defined benefit pension?

One approach is to price out a single premium annuity that would pay out the same. +1 http://immediateannuities.com to get quotes I entered $300k for a single 65 yo male (entered state = NJ at random) to receive $1614/mo ($19,368/yr) for life. I'm not sure if the quote provided for inflation adjust...
by k66
Sun May 15, 2016 1:25 pm
Forum: Investing - Theory, News & General
Topic: Living with the 4% Rule
Replies: 19
Views: 2737

Re: Living with the 4% Rule

My understanding of the 4% rule is as follows. Do you see it differently on any point(s)? 3. You should fund a savings account from the proceeds of the 4% for large expenses that don't recur on an annual basis, like a new car, home remodeling, and special trips, etc. No fair hitting the portfolio t...
by k66
Thu May 05, 2016 10:29 pm
Forum: Personal Finance (Not Investing)
Topic: The crossover point [When can you retire?]
Replies: 59
Views: 10421

Re: The crossover point

Sequence of returns is a real concern for any portfolio period. If, and only if, you do have flexibility in your spending will it less of a concern. But not every retiree has sufficient flexibility.
by k66
Wed May 04, 2016 9:04 am
Forum: Investing - Theory, News & General
Topic: How many funds in your portfolio?
Replies: 99
Views: 7712

Re: How many funds in your portfolio?

4 currently (VAB, VCN, VTI, VXUS), but looking to get it down to 3 or less.
by k66
Tue May 03, 2016 6:02 pm
Forum: Investing - Theory, News & General
Topic: A question about simulators' failure rate
Replies: 6
Views: 814

Re: A question about simulators' failure rate

I ultimately decided that evaluating a failure rate was essentially useless to me for two reasons. First, I intend to draw down my retirement portfolio using RMD-like withdrawals (not unlike VPW) from a tax-advantaged account and will supplement with federal pensions. In that context, I would never ...
by k66
Mon May 02, 2016 8:10 pm
Forum: Investing - Theory, News & General
Topic: Historical Performance of 10 yr vs Total Bond
Replies: 5
Views: 740

Re: Historical Performance of 10 yr vs Total Bond

... I get 5.9% for Intermediate Treasury and 5.64% for Total Bond from 1992-2016... So a 26 bp management fee (approx)? Seems reasonable I guess. I also use Damodaran's data for S&P 500 and 10 yr Treasurys. To account for MERs and other trading costs, inefficiencies, etc. In my spreadsheet calc...
by k66
Sun May 01, 2016 12:02 pm
Forum: Investing - Theory, News & General
Topic: Numeracy and Wealth
Replies: 44
Views: 6607

Re: Numeracy and Wealth

Here's a numeracy test:

https://www.kent.ac.uk/careers/tests/mathstest.htm

in case you wanted to self-evaluate.
by k66
Mon Apr 25, 2016 7:24 pm
Forum: Investing - Theory, News & General
Topic: Dow 100,000
Replies: 33
Views: 5613

Re: Dow 100,000

The DJIA was at ~3250 in late 1992 and has since experienced an expansion of 5.5 times that value to reach ~18k today including both the explosive increases through the 1990s and the sombre reality of the new millennium . Another 5.5X expansion would take it to the target 100k value. There's no reas...
by k66
Wed Apr 20, 2016 11:52 am
Forum: Investing - Theory, News & General
Topic: Should you follow the 4% rule?
Replies: 23
Views: 3213

Re: Should you follow the 4% rule?

As an actual withdrawal method, the 4% strategy is pretty limited and of no real practical value. The only significance that I see is in determining adequacy of the portfolio size to endure a reasonable retirement period--i.e. If your portfolio is approximately 25x your retirement spending expectati...
by k66
Wed Apr 20, 2016 9:06 am
Forum: Investing - Theory, News & General
Topic: A different look at the Shiller CAPE 10
Replies: 29
Views: 3105

Re: A different look at the Shiller CAPE 10

Interesting--thank you Larry.

Can the CAPE-10 be calculated from 1960 onward, similar to the time period used for CAPE-5 and -6 histories? Would the CAPE-10 average then be a bit higher and the apparent overvaluation become lower as a result?
by k66
Sun Apr 17, 2016 11:32 am
Forum: Investing - Theory, News & General
Topic: Quick Question - To Time or Not to Time
Replies: 14
Views: 1503

Re: Quick Question - To Time or Not to Time

I'm not being facetious; this is exactly what you need to do in order to wait out an investment successfully. 1. Determine which investment you want to make (stock, fund, real estate, etc). 2. Prepare a future price history of the investment with sufficient accuracy. 3. Select the most appropriate ...
by k66
Sun Apr 17, 2016 11:03 am
Forum: Investing - Theory, News & General
Topic: How the economic machine works
Replies: 13
Views: 1837

Re: How the economic machine works

I have seen other cycle-based constructs of the economy. In one, there are three levels of the overall cycle that superimpose a primary 64 year wave having individual sub-cycles of 16 years each and tertiary set having four 4-year cycles within each of those. No rationale was ever given--it seemed t...
by k66
Sat Apr 16, 2016 7:19 pm
Forum: Investing - Theory, News & General
Topic: Quick Question - To Time or Not to Time
Replies: 14
Views: 1503

Re: Quick Question - To Time or Not to Time

I'm not being facetious; this is exactly what you need to do in order to wait out an investment successfully. 1. Determine which investment you want to make (stock, fund, real estate, etc). 2. Prepare a future price history of the investment with sufficient accuracy. 3. Select the most appropriate p...
by k66
Thu Apr 07, 2016 9:03 am
Forum: Investing - Theory, News & General
Topic: Need S&P 500 total return calculator
Replies: 17
Views: 1681

Re: Need S&P 500 total return calculator

tdub wrote:Based on the site lack_ey found it looks like 1 dollar invested in 1950 would be nearly 1000 today.

Image
Image


And when run with CPI included, the annualized index return yields 3.7% (7.2% w/ dividends reinvested).
by k66
Mon Apr 04, 2016 10:59 pm
Forum: Investing - Theory, News & General
Topic: "Simple vs. Complex"
Replies: 12
Views: 2024

Re: "Simple vs. Complex"

One of the biggest hurdles I had to get over was the implicit need to build a complex portfolio--seemingly because investing in the market(s) was complex as well. Once I got my head around the notion that having a simpler portfolio was a better, more durable solution, then I could sleep much sounder.

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